Back to How Zopa minimises risk

We have more than 11 years’ experience of successfully managing risk

As a result, we have a wealth of information we can use to inform our underwriting and credit scoring strategies to effectively manage risk.

Expected versus actual defaults

When a loan is approved, we make an assumption about the likelihood of default over the full term of the loan ("Expected defaults at origination"). As a loan ages, we compare expected default rates from when the loan began to the actual defaults to date. This allows us to revise our projections of lifetime default rates ("Revised projected defaults"). Arrears are a valuable indicator of defaults that are likely to take place in the near term, and we take these into account when revising our predictions.

Since the introduction and inclusion of higher risk markets (D and E) in Zopa Plus, default rates (both actual and expected) have increased slightly. We anticipated this, and have factored it into all our risk analyses.

Expected defaults at origination Actual defaults so far % of loans repaid to date Revised projected defaults Actual arrears (>45 days) Risk markets available to retail lenders
2016 3.88% 0.26% 11% 3.88% 0.24% A*- E
2015 2.88% 1.51% 40% 2.71% 0.40% A*- C
2014 2.06% 1.61% 69% 1.89% 0.21% A*- C
2013 1.30% 0.67% 89% 0.75% 0.03% A*- C
2012 1.26% 0.72% 98% 0.75% 0.03% A*- C
2011 1.72% 0.74% 100% A*- C
2010 2.31% 1.60% 100% A*- C
2009 2.43% 1.39% 100% A*- C
2008 3.58% 4.29% 100% A*- C
2007 2.74% 0.41% 100% A*- C
2006 1.28% 0.13% 100% A*- C
2005 1.01% 0.00% 100% A - B

Last Updated: 1st September 2016

Table legend

Expected defaults at origination :
Total defaults we expect over the lifetime of loans when we originated them, as a percentage of the amount lent in the calendar year.
Actual defaults so far :
Total defaults we have observed to date, as a percentage of the amount lent in the calendar year.
% of loans repaid
 to date :
The total amount that has been paid back of the amount lent in the calendar year.
Revised projected defaults :
Revised defaults we expect over the lifetime of loans based on actual performance to date, as a percentage of the amount lent in the calendar year.
Actual arrears (>45 days) :
Total amount more than 45 days late but not defaulted, as a percentage of all loans made in the calendar year.

This data reflects all markets that are currently available to retail lenders.

We're working with the P2PFA to agree standard statistics which show borrowers' non-repayment performance.

Important information

Before you go any further, remember past performance is not a reliable indicator of future results. And forecasts are not a reliable indicator of future performance.

Read more about risk information.

Zopa's public loan book showing historical performance is available for download.

To date, we've helped 63,000 individuals lend out over £1.71bn

Got a question?

Email: contactus@zopa.com

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